Modelo Declares Itself Fastest-Growing U.S. Brew in New Ads

Modelo Especial -- whose sales have quietly surged for years -- is about to get a lot louder.

The Mexican import is debuting new ads this year declaring itself the "fastest growing beer in America." And in August, Modelo will adopt a masterbrand strategy that includes renaming Negra Modelo to Modelo Negra. A packaging overhaul will put Negra in black packaging that uses the same design as white-labeled Modelo Especial cans and bottles.

The masterbrand approach clears the way for line extensions under the Modelo name, possibly including a beer that is not as dark as Negra but not as light as Modelo Especial, said Jim Sabia, chief marketing officer for the beer division at Constellation Brands. The marketer's brands include Modelo, Corona, Pacifico and Victoria.

Constellation will hike media spending on the Modelo mega brand by more than 10%, he said. Constellation spent $48.9 million in measured media on Modelo Especial in 2015 and just $62,200 on Negra Modelo, according to Kantar Media.

Modelo Negra's New Look Credit: Constellation Brands

The new Modelo Negra packaging will hit stores this fall, along with an ad called "Casa Modelo" that shows off both Modelo varieties. But media spending is kicking into full gear now with the debut of new ads for Modelo Especial that make the "fastest-growing" claim (see above). The spots are by Ogilvy Chicago.

The ads harken back to the brew's founding in 1925 in Tacuba, Mexico City in the wake of the Mexican Revolution. The ad describes Modelo as "brewed with a fighting spirit since 1925 for a taste that's pure gold." The beer did not enter the states until the 1990s, and until recently grew without the help of much ad support. Hispanic TV ads first appeared just a few years ago and the brand did not break its first national English-language campaign until last year.

But despite the relatively modest marketing support, Modelo has surged. Shipments grew 19.2% in 2015 and the brew finished the year ranked as the eighth-largest beer brand in the U.S., according to Beer Marketer's Insights.

Modelo's 2015 growth came as seven of the 10 largest beer brands all declined, including No. 1 Bud Light, which fell 2.5%. The next-fastest growing brand was Michelob Ultra (ranked 9th), which grew shipments by 17.4% and was the only other big brand that posted double-digit growth, according to Beer Marketer's Insights.

Constellation controls Modelo in the U.S., while the brand has been operated globally by Anheuser-Busch Inbev since it acquired Mexican brewer Grupo Modelo in 2013.

The "fastest-growing" claim comes as size, in some cases, is no longer seen as a brand strength among consumers. The craft beer surge is led by smaller brands that have captured the attention of drinkers who tend to shift preferences on a weekly or even daily basis, jumping from brand to brand. Constellation execs had "a good debate" about using the fastest-growing claim, Mr. Sabia said. But "we just felt like when we talked to consumers about it, they felt, 'That's cool I never knew about it.' "

"We were very careful on how we did it. It had to tie to the story. This is not about boasting. This brand is modest, we're humble," he added. "It's not like we got a $100 million advertising budget in the first year we were introduced in America. We've been working, working, working. We want to maintain the values of the brand."

One goal is to spark curiosity among general market consumers who have not tried Modelo, while also luring retailers that might not yet have it stocked, he said.

Negra Modelo, which remains a niche brand, stands to gain by its inclusion in the new "Casa Modelo" masterbrand ads that break in late August. The ad, below, will run in high-profile programming such as NFL games, Mr. Sabia said.

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Here is what Constellation has planned in 2016 for its other brands.

Corona Extra
The nation's largest imported beer keeps growing: Shipments were up 7.7% last year, according to Beer Marketer's Insights. This year the brand will continue its "Find Your Beach" campaign. Here is one of the new ads by Cramer-Krasselt.

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Hispanic advertising is handled by The Community, which has also won some general market assignments. A new ad that could air in English and Spanish in 2016 shows a man in dialogue with his alarm clock, which he is leaving behind for the summer. It is a similar approach to a spot the agency did last year that ran in general market called "Dear Summer" in which winter writes a letter to summer.

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Corona Light
New ads by Ogilvy will continue the "light cerveza" campaign that debuted last year. The soundtrack is "Cha Cha Cha" by Jimmy Luxury.

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Pacifico
The brand -- which ran TV ads in four markets last year -- will grow its media investment this year to cover 11 western states, including Washington, Oregon, California, Arizona, Nevada, Utah, Colorado, Idaho, Montana, Alaska and Hawaii. An ad by Cramer-Krasselt will tell the story of how California surfers discovered the beer in Baja, Mexico in the early 1970s and brought it back to the states.

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Victoria
Victoria is Mexico's oldest beer brand, but Constellation only brought it to the states in 2010. This year Victoria will be backed with its first TV ads (in Spanish) by The Community. Spots show a white man who is hanging out with Mexican friends and tries very hard to fit in. The ads, which carry the tagline, "Proudly Mexican for 150 years," targets first-generation Hispanic consumers "who know the brand, that love the brand," Mr. Sabia said.

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Tocayo beer Credit: Constellation

Tocayo
Constellation launched the entry-level craft beer in Chicago last year via a collaboration with celebrity chef Rick Bayless and Chicagoland craft brewer Two Brothers. It is only sold on draft, but this month Tocayo will be made available in bottles and cans for this first time. The brand could expand beyond Chicago in the coming years, Mr. Sabia said.

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E.J. Schultz

E.J. Schultz is the Chicago Bureau Chief at Advertising Age and covers beverage, automotive and sports marketing. He is a former reporter for McClatchy newspapers, including the Fresno Bee, where he covered business and state government and politics, and the Island Packet in South Carolina. His journalism awards include a 2012 Jesse H. Neal National Business Journalism Award for best range of work by a single author and a 2011 Best in Business award for a feature story from the Society of American Business Editors and Writers. A native of Cincinnati, Mr. Schultz has an economics degree from Xavier University and a masters in journalism from Northwestern University.